14.10.2014 - Volatility on the markets has declined
The price of euro rose yesterday against the background of low volatility, which was associated with the holiday in the United States and the lack of important macro. Investors were pleased by the news of the return of Russian troops that were near the border with Ukraine, in places of permanent deployment. Despite this, the situation in the region remains tense. Today we should pay attention to data on industrial production index and business sentiment in the Eurozone (09:00 GMT). We maintain a medium-term negative outlook and recommend holding short positions on the euro.
The British pound was unable to continue growing yesterday. Investors do not hurry with actions and expect today's publication the block of macro statistics on inflation. Thus, today, will be released the data on producer price index, consumer price index, the retail price index and the price index for housing. According to our estimates the potential for the fall of the pound is low and in the near future quotes will probably continue to consolidate around current levels. Despite this, expectation of interest rate hikes may lead to repeated growth of price to the levels 1,6670-1,6900. We maintain our positive medium-term outlook for the pound.
The Japanese Yen continues to strengthen gradually. The reason for the increase in the price became factors such as the weakening of the dollar, closing speculative positions, as well as increased demand for defensive assets due to the deteriorating outlook for growth in the world economy, as well as the fall on global stock markets. Today it was announced that the monetary base M2 in September increased by 3.0%, which is 0.1% better than expected, and the consumer price index fell to 3.5%, against 3.9% in August. We expect further easing of monetary policy in Japan and maintain a medium-term negative outlook.
The price of the Australian dollar rose slightly on the news on the growth of exports and imports in China. Despite this, investors were disappointed by the data on the index of business confidence of the country, which fell to 5 in September, which is 2 less than in August and is the minimum figure in more than a year. Besides in the RBA reaffirmed overvalued the Australian dollar and the need to decrease due to lower investments in the mining sector and a fall in iron ore prices. We maintain a medium-term negative outlook for the Australian dollar and recommend holding short positions.
The New Zealand dollar has stopped growing and is consolidated in a narrow range due to uncertainty on the global markets. Strengthening of the dollar has stopped, but at the same time, the New Zealand dollar has no reason for growth. Positive was the data on trading in China, where volumes have risen, but the trade deficit in New Zealand, low export prices and the policy of the Reserve Bank of New Zealand lead to further price decline. We maintain a medium-term negative outlook and recommend holding short positions.